Can dollarization constrain a populist leader? The case of Rafael Correa in Ecuador
AutorIgnacio Savanti; Nicolás Cachanosky; Alexander Salter
Publicado enJournal of Economic Behavior & Organization
ISSN / ISBNISSN: 0167-2681
Rafael Correa's presidency in Ecuador (2007 – 2017) exemplifies left-leaning populist regimes in Latin America. However, there is a key difference: Ecuador is a dollarized economy. This removes the possibility of fiscal dominance over monetary policy as is common in populist regimes. This paper studies how dollarization constraints a populist leader. We discuss the incentives of a budget constraint immune to monetization and the failed attempt to launch a national digital currency.
Acceder al documento: https://www.sciencedirect.com/science/article/abs/pii/S0167268122002025